The committee headed by joint secretary NK Singh in the petroleum ministry, in its report had said, setting up of the infrastructure facility at Pipava port would mean additional expenditure of Rs 1,000 crore and further time delay in the project completion, petroleum ministry sources said.

The objection raised by the committee has put the ministry in a difficult situation of choosing between two port facilities -- Vadinar without state environment clearances and Pipava with insufficient infrastructure, said sources.

Earlier, Bina refinery was to get imported crude from Oman at the Vadinar port in Gujarat. However, environmental clearances were not forthcoming and the crude landing facility was proposed to be shifted to Pipava, another port in Gujarat.

The Rs 7,000 crore Binarefinery is a 50:50 joint venture project between Bharat Petroleum Corporation (BPCL) and Oman Oil Corporation (OOC) which received the government approval in 1995 and the project has already got delayed by over two years due to various clearances, the sources said.

OOC had already sounded its displeasure over the delays in implementing the project and had even hinted at pulling out of the venture.

Sources said in the wake of this report, the ministry would have to take a final view in either waiting for the Vadinar clearances or go ahead with Pipava incurring additional cost.

At a review meeting attended by petroleum minister VK Ramamurthy earlier in the month, it was pointed out that shifting crude imports from Vadinar to Pipava would mean cost escalation at the output end due to the additional cost in infrastructure development apart from the possible delay in the six million tonnes per annum refinery.

The sources said the refinery project had already incurred a cost escalation of Rs 2,000 croredue to delay in getting various approvals including environment clearance from the state government of Gujarat.

Though the project had got environment clearance from the Centre for laying of the 943 km long cross-country crude oil pipeline from Vadinar to Bina, state environment department has not given a clearance for the pipeline stating it would harm the marine park situated near the site, sources said.

However, the National Institute of Oceanography had already said that laying of the crude pipeline would not cause any harm to the marine park. In the wake of the delay caused due to state government's clearance the petroleum ministry had set up a committee to work out the feasibility of shifting the import facility site to Pipava vis-a-vis Vadinar, sources said.

Other members of the committee included, representative from the oil coordination committee (OCC), experts from Engineers India Ltd, advisors in ministry of surface transport and officials of the Bina refinery, they said.

The anticipatedcompletion of the project is by October 2002 and in case the import facility is shifted to Pipava it would also lead to a huge time delay in preparing the detailed feasibility report, sources added.